Linear regression

Willster1 · January 2021

I am really struggling with linear regression, every time i see that formula (Y = a + (bX)) i panic.

I don't understand this question on a mock exam at all, I got totally lost down a rabbit hole and just put random stuff in. The main part was the waste kg at the bottom, i tried to use the high low method to find the variable and fixed element- (23,650.00-23,256.25) / (q4-q1) but i have no idea now how they got £10,000 as the fixed element and 5.25 for the variable i'm just not getting it.

any help would be appreciated. attached question and my incorrect answers.

thanks

Pian32 · January 2021

So I'm reading through the whole question. First of all you want to have another look at the question:

What are the Quarterly forecasts for 20X4 in whole kgs?

You've used the correct method but the wrong x values remember X=0 is q1 of 20X0.

Following on from that the waste produced in q1 20X2

=2100+25x (x=9)

=2100 + 25 *9 = 2325 kg

and the waste produced in q4 of 20X2 (x=12) (There is a typoin the answer box it shouldn't say cost)

=2100+25* 12 = 2400 kg

What are the values of a and b in the cost equation?

Find b first:

b is the gradient of the line so you need to do (Change in Y)/(Change in x)

Change in Y = 23650-23256.25 = 393.75
Change in x = 2400-2325 = 75 (X in this question is number of kg of waste not the quarter number.)

b = 5.25

To find a use the q1 figures

23256.25 = a + 5.25*2325

a = 11050 (Are you sure they got 10,000?)

Check in q4

11050 + 5.25 * 2400 = 23650.

For linear regression take the following steps:

Identify what Y and X are. (Other letters could be used)
Find the change in Y and change in X
Use this to find b
Take b and put into equation for a value of x where you already know the y value.
Rearrange to find a
Check using the other set of x and y values.

Make sure you redefine y and x if the subject of the question changes (In this question x started as quarters but the later parts it was kg)

Linear regression

Comments

Categories